AAII Survey Shows Retail Bullishness Hits 16-Month Low
Bearish sentiment among individual investors reached 53.3%, marking the lowest bullish share in over a year.
Key points
- AAII survey bearish sentiment reached 53.3 percent, the lowest bullish share in 16 months.
- The bull-bear spread fell to negative 24.5 points, well below the historical average of 6.5.
- Over 50 percent of investors hold above-average cash, signaling strong defensive positioning.
Retail investor bearishness surged to 53.3 percent in the latest AAII survey. This figure represents a 16-month low for market optimism among individual traders.
Bullish expectations dropped to 28.8 percent, the lowest level recorded in twelve months. The shift reflects growing pessimism driven by high energy costs and Federal Reserve tightening.
Bull-Bear Spread Hits Record Low
The bull-bear spread plunged to negative 24.5 percentage points. This is the weakest reading since May 2025 and sits far below the historical average.
The metric has remained below its long-term average of 6.5 points for nine straight weeks. Charles Rotblut of AAII described the gap as unusually low for the market.
Defensive Cash Positions Dominate Portfolios
More than 50 percent of survey participants hold above-average cash allocations. This indicates a clear pivot toward risk mitigation among individual investors.
A further 19.1 percent reported cash holdings much higher than normal. Such defensive positioning highlights deep caution despite index levels near record highs.
Market Reaction Stays Mixed
The S&P 500 trades within two percent of its all-time high. The Dow Jones eased 1.6 percent while the Nasdaq 100 gained 0.6 percent.
Stocktwits data shows high message volumes with bearish sentiment toward major ETFs. This divergence between price action and mood signals significant uncertainty.
